Academic journal article Texas Law Review

Grossly Excessive Penalties in the Battle against Illegal File-Sharing: The Troubling Effects of Aggregating Minimum Statutory Damages for Copyright Infringement*

Academic journal article Texas Law Review

Grossly Excessive Penalties in the Battle against Illegal File-Sharing: The Troubling Effects of Aggregating Minimum Statutory Damages for Copyright Infringement*

Article excerpt

I. Introduction

Imagine that you are a file-sharer. You download copyrighted songs to your computer for your personal use. You think of it like recording songs from the radio. Now imagine that a plaintiff sues you for downloading the one song to which she holds a registered copyright. Suppose the plaintiff knows that her monetary loss caused by your conduct is exactly one dollar.1 At trial, this plaintiff can elect to recover statutory damages for copyright infringement and thereby receive a guaranteed $750 in damages,2 all but one dollar of which would be noncompensatory in nature. The noncompensatory damages, those which exceed the loss that you caused, serve as a punishment,3 and there are several valid reasons for their imposition: they admonish you for your misconduct, they deter future infringement by increasing its cost, and they add an incentive for the copyright owner to sue.

Now suppose that you have been a file-sharer for the past few years, accumulating some four thousand songs on your computer, all copyrighted and registered by the plaintiff. When the minimum statutory damage award of $750 is aggregated across every copyright that you have infringed, you are now liable for at least three million dollars in statutory damages to a plaintiff who has suffered four thousand dollars in monetary harm.4 At this point, a "suspicious judicial eyebrow" might be raised.5

This is the scenario examined by this Note, and its concerns are not merely hypothetical. Recent copyright infringement lawsuits brought by major record companies against individual file-sharers target persons who have downloaded and shared on average more than one thousand copyrighted songs,6 and these lawsuits ask for the same statutory damages used in the introductory example.7 It is not surprising that most defendants have chosen to settle these cases rather than face the tremendous statutory damages prescribed by copyright law.8

These lawsuits illustrate that the punitive effect of even the minimum statutory damage award, when aggregated across a large number of similar acts, can grow so enormous that it becomes an unconstitutionally excessive punishment. The Second Circuit recently suggested as much when considering a different statutory damage scheme.9 This Note argues that Congress should modify the Copyright Act's minimum statutory damage provision10 because, when massively aggregated in the file-sharing scenario, it imposes an unconstitutional grossly excessive penalty.

Underlying this Note's criticism is the idea that a statutory damage award can be divided into compensatory and punitive components.11 While distinguishing between the two may seem antithetical to one traditional justification for statutory damages-to provide compensation when the harm caused is hard to determine-for file-sharing at least, a rough dichotomy can still be drawn.12 As discussed below, the punitive component of even the minimum statutory damage award turns out to be quite large.13

This large punitive component is not troublesome when statutory damages are awarded for one or a few instances of illegal file-sharing. The punitive component serves as an incentive to sue, and punishment for breaking the law is quite normal. However, when a given punishment is massively aggregated across many similar instances of misconduct, the resulting penalty can become so large that it becomes grossly excessive in relation to any legitimate interest in punishment and deterrence. As with the large punitive damage awards that the Court has held unconstitutional in the past decade,14 such a tremendous punishment violates substantive due process guarantees.

Critics, however, have frowned on the Court's enforcement of an economic substantive due process right and urged the Court to refrain from action.15 Scholars have noted that courts do not enforce all constitutional norms to their full conceptual limits and that economic substantive due process is a typical subject of such underenforcement. …

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